The index construction is straightforward: for every firm we add one point for every provision that restricts shareholder rights (increases managerial power). This power distinction is straightforward in most cases, as is discussed below. While this simple index does not accurately reflect the relative impacts of different provisions, it has the advantage of being transparent and easily reproducible. The index does not require any judgments about the efficacy or wealth effects of any of these provisions; we only consider the impact on the balance of power.